Pakistan electricity costs impacted by levy reduction and fuel adjustments

Pakistan's Ministry of Energy has announced a significant reduction in the captive levy for off-grid power plants. For August, the levy has been slashed to Rs343 per MMBTU, a 76 percent decrease from the Rs1,406 peak seen in January. This change follows a revision in the formula used to calculate the levy, moving from a peak-only B3 industrial tariff to an average of peak and off-peak rates. This reduction means electricity consumers will receive less of the previously projected Re0.9 per unit relief intended to be funded by these levies.

Separately, the power division has projected a fuel cost adjustment (FCA) of Rs2.56 per unit for electricity consumed in September. This adjustment is estimated to add approximately Rs32.7 billion to consumer electricity bills in November. Officials noted that while international fuel prices have risen due to regional conflicts and supply chain disruptions, targeted load management helped avert a potentially higher increase of Rs5-6 per unit. The division also highlighted that using imported re-gasified liquefied natural gas (RLNG) at domestic gas prices helped reduce the financial burden by 83 paise per unit.